Articles Posted in Arbitration & Mediation

The Fifth Circuit affirmed the district court's order compelling arbitration and final judgment in a suit between IQ and WD-40. The court held that the 1996 Agreement between the parties contained an arbitration clause and IQ acknowledges that this arbitration covered some set of claims; IQ waived its challenged to the district court's conclusion that the parties clearly and unmistakably intended to delegate the issue of arbitrability to the arbitrator by conceding it before the district court; and WD-40's assertion of arbitrability was not wholly groundless. The court also held that the arbitrators acted within their authority in deciding that the dispute was arbitrable, and the district court was correct to deny IQ's motion to vacate the award under 9 U.S.C. 10(a)(4). View "IQ Products Co. v. WD-40 Co." on Justia Law

Brittania-U filed suit against defendants for fraud, misrepresentation, and tortious interference with business relations arising out of a bidding process for oil leases in Nigeria. The Fifth Circuit affirmed the district court's denial of Brittania-U's motion to remand and the grant of defendants' motions to dismiss based on an arbitration provision in a confidentiality agreement between Brittania-U and Chevron. The court held that jurisdiction exists, and removal was proper, under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 9 U.S.C. 203. The court also held that the district court did not err in recognizing that the confidentiality agreement's arbitration provision delegated the question of arbitrability to the arbitrators. View "Brittania-U Nigeria, Ltd. v. Chevron USA, Inc." on Justia Law

The Fifth Circuit held that, because the matter was not ripe at the time the district court entered judgment in this case, the district court's judgment was void for lack of subject matter jurisdiction. Therefore, the court vacated the judgment. The court explained that, even though subsequent intervening events have created a controversy that was now ripe, the court could not retroactively resurrect the district court's void judgment under the facts of this case. Nevertheless, because the basic underlying controversy, originally raised and pursued by these same parties, was now ripe, the court remanded the case to the district court for such orders and proceedings as the district court deemed necessary and appropriate. View "Lower Colorado River Authority v. Papalote Creek II LLC" on Justia Law

Plaintiff filed suit against his former employer, GE, alleging claims of discrimination and retaliation. The district court granted GE's motion to compel arbitration and dismissed the case, only to reopen it later to withdraw its prior order compelling the arbitration. The Fifth Circuit held that the district court lacked subject matter jurisdiction to withdraw its order compelling arbitration and reopen the case due to a default in the arbitral process. Therefore, the Fifth Circuit vacated and remanded for further proceedings, noting that the district court's jurisdiction was limited to determining whether an agreement to arbitrate still existed and enforcing that agreement. View "Salas v. GE Oil & Gas" on Justia Law

Defendant and the chief financial officer of NRMC signed three documents detailing terms upon which defendant would provide audit services for NRMC. Defendant moved to compel arbitration and to stay proceedings in federal district court pending arbitration. The district court denied the motions. At issue in this interlocutory appeal was whether the "minutes rule," also known as the "minutes requirement," under Mississippi law pertains to the issue of the contract's validity, or instead more closely resembles whether the alleged obligor NRMC ever signed the contract. The court concluded that, with respect to the 2010 and 2012 engagement letters, the minutes rule pertains to whether written agreements between NRMC and defendant were formed in each of those years. Therefore, whether written contracts were consummated was a question for the courts rather than an arbitrator. The court also concluded that because of the minutes requirement, the 2010 and 2012 engagement letters were not contracts to which NRMC was a party. Therefore, NRMC was not a party to the arbitration provisions contained in the 2010 and 2012 engagement letters. The court further concluded that the minutes of NRMC's board reflect that an agreement with defendant was reached in 2009. Therefore, the minutes rule does not pertain to that contract's formation. On remand, the district court should determine the scope of the arbitration agreement. Finally, the court concluded that the Mississippi minutes rule was one of general applicability to Mississippi contracts with public entities and the requirement of section 2 of the Federal Arbitration Act (FAA), 9 U.S.C. 2, that courts must place arbitration agreements on an equal footing with other contracts does not foreclose its application in this case. The court affirmed as to the 2010 and 2012 engagement letters, vacated as to the 2009 engagement letter, and remanded. View "Lefoldt, Jr. v. Rentfro" on Justia Law

This case stems from the collapse of Allen Stanford's Ponzi scheme. The court concluded that the Receiver cannot be compelled to arbitrate its claims against any of the defendants; the court did not reach the Receiver's argument that these particular arbitration agreements at issue are additionally unenforceable because they were instruments of the fraud inasmuch as the privacy they provided facilitated the fraud and because the Stanford entities were coerced into accepting them by Stanford as part of his Ponzi scheme; the court also did not reach the Receiver's similar but broader policy argument that the underlying purpose of the federal equity receivership statutes is at odds with the Federal Arbitration Act's, 9 U.S.C. 1 et seq., mandate in favor of arbitration; and the court rejected arguments raised by some of the defendants that the district court’s order exceeded the scope of the court's mandate in Alguire III. The court explained that, because the Receiver properly brings his Texas Uniform Fraudulent Transfer Act, Tex. Bus. & Comm. Code 24.009, claims on behalf of the Stanford International Bank, which did not consent to arbitration with any of the defendant employees, other than Luis Giusti, it cannot be compelled to arbitrate with those defendants. Moreover, because Giusti waived his right to arbitration, the Receiver cannot be compelled to arbitrate its claims against him either. Accordingly, the court affirmed the judgment. View "Janvey v. Alguire" on Justia Law

Plaintiff, individually and on behalf of other similarly situated individuals, filed suit against his former employer, IBC, contending that IBC violated the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq., by failing to pay proper overtime rates. The district court denied IBC's motion to compel arbitration. The court concluded that, upon a motion to compel arbitration, a court should address the arbitrability of the plaintiff’s claim at the outset of the litigation. Therefore, the district court was required to consider the arbitrability of plaintiff's claim before conditionally certifying the collective. The court further concluded that, because the arbitration agreement contains a delegation clause, any disputes about the arbitrability of plaintiff's claim or the scope of the arbitration agreement must be decided by the arbitrator, not the courts. Accordingly, the court concluded that the district court erred in denying the motion to compel arbitration and the court reversed and remanded. The court vacated the stay pending appeal. View "Reyna v. Int'l Bank of Commerce" on Justia Law

Plaintiff appealed the district court's orders refusing to enjoin arbitration and confirming an award in favor of the WestEnd Parties. The court concluded that it has jurisdiction to review the Injunction Order; the WestEnd Parties did not substantially invoke the judicial process and thus have not waived arbitration; and the district court did not err in refusing to enjoin arbitration based on res judicata where the temporary restraining order (TRO) suit and the arbitration claims do not arise from the same transaction. The court applied the vacatur standards of the Federal Arbitration Act (FAA), 9 U.S.C. 10(a)(2), and concluded that plaintiff points to no specific facts that lead to the conclusion that the Arbitrator was biased in the WestEnd Parties’ favor, and the Arbitrator did not exceed his powers in making the award. Accordingly, the court affirmed the judgment. View "Cooper v. WestEnd Capital Mgmt, LLC" on Justia Law

Plaintiff filed suit against his employer, Supreme, under the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq. After the action was filed but, according to Supreme, before it had learned of the suit, the company announced a new policy requiring employees to arbitrate employment disputes, including FLSA claims. The district court denied Supreme’s motion to dismiss or compel arbitration. The court reversed, concluding that the arbitration agreement is binding and contains a delegation clause transferring the power to decide threshold questions of arbitrability to the arbitrator. The court remanded and directed the district court to enter an order compelling arbitration. View "Kubala, Jr. v. Supreme Production Serv." on Justia Law